India’s Jewelry Retailers Poised for Growth
By Dilipp S Nag www.diamonds.net
India’s organized jewelry retail trade is expected to account for 10 percent of the country's total jewelry retail market by 2016, up from the current 4 percent, according to CARE Research, a division of Credit Analysis & Research Ltd. The company noted that growth is being spurred by rising income levels across non-metro, large and small cities and increased consumer spending on branded and luxury goods in these areas.
''Factors such as increased competition, stagnation and high rental costs in metros compared to its easy availability in tier-I and tier-II cities at cheaper rates, augur well for the growth of organized retailing,'' wrote CARE Research’s analysts Revati Kasture, Divyesh Shah and Sagar Shah.
They noted that large jewelers are offering customized offerings according to local tastes in each city to drive demand. CARE Research expects that branded jewelry will grow at 40 percent each of the next three years as many domestic and international brands are expected to raise their profile in the country.
As a result, India’s total gems and jewelry market, which was valued at approximately $27.5 billion in fiscal 2011, is likely to grow at 15 percent per year to reach $55.3 billion by fiscal 2016, CARE Research predicted.
''The high price of gold is increasingly driving demand for diamond-studded jewelry as diamonds are considered to be more luxurious and fashionable and an alternative investment option with multiple uses on all occasions,'' the analysts explained.
CARE Research stated that bigger brands have witnessed a surge in demand in the past five years mainly due to increasing consumer sophistication, wider choices, media influences and alternative retail channels.
The analysts noted that prominent players such as Gitanjali Gems Ltd. and Titan Industries Ltd. have strategic plans to add retail shops, franchise, shop-in-shops and increase online presence to capitalize on the growing demand. Others, including Tara Jewellers, Tribhovandas Bhimji Zaveri Ltd. (TBZ), PC Jeweller Ltd., Joyalukkas India Ltd. are planning to raise funds through public offerings to finance their proposed retail expansions.
India's small and independent jewelers are also starting to organize themselves and expand to share a common brand identity and marketing strategy, the research explained.
CARE Research noted the major driver for luxury jewelry is wedding related with bridal jewelry accounting for more than 50 percent of jewelry sales.
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